WARNER LAMBERT PHARM. CO. v. SYLK

This case comes before the court on a suit by a creditor to require a guarantor to pay the debt of a bankrupt corporation. The parties have stipulated to the following facts:*

1. Plaintiff is a Delaware corporation.

2. Defendant, at all times pertinent hereto, was an officer, director and stockholder of Sun Ray Drug Company (a Pennsylvania corporation), which name shall refer to the corporation existing prior to the merger set forth in paragraph 3 below and the Sun Ray Drug Company (a Pennsylvania corporation) chartered in Pennsylvania on February 23, 1961, Consolidated Retail Stores, Inc. (a Delaware corporation), and Penrose Industries Corporation (a Delaware corporation).

8. Sun Ray Drug Company, as a wholly-owned subsidiary of Consolidated Sun Ray, Inc., continued to operate the said chain of drug stores.

9. (a) Plaintiff sold merchandise to Sun Ray Drug Company on purchase orders issued by it prior to the merger and name changes as aforesaid and continued to do so until approximately May of 1962.

(b) At that time plaintiff concluded that the Sun Ray account was deemed by it to be insecure and seriously past due.

(c) In the month of May, 1962, plaintiff requested, and on or about May 25, 1962, received the guarantee admittedly executed by defendant, A true and correct copy of which is appended hereto as Exhibit "A-1".

11. In accordance with the aforesaid transactions, prior to May 11, 1965 plaintiff was owed the sum of $73,244.49 for goods sold and delivered.

12. On March 18, 1965, plaintiff made demand on defendant for payment under defendant's guaranty.

13. On May 11, 1965, the Honorable Francis L. VanDusen appointed Leon J. Obermayer as "Conservator", pursuant to a decree, a copy of which is hereto appended and marked Exhibit "A".

14. (a) Pursuant to the Order appointing the Conservator, he was obliged to notify creditors of Sun Ray Drug Company and Penrose Industries Corporation requiring them to file proofs of claim setting forth the nature and amount of their claims and whether they claimed secured lien or priority status.

(b) Under paragraph 12 of said decree all interested parties were enjoined from instituting or continuing suits or proceedings at law or in equity against the personal property which was the subject matter of a sales agreement between Sun Ray Drug Company and Marrud, Inc.

17. On or about June 25, 1965, plaintiff advised defendant, by certified mail, that it had filed its proof of claim with the Conservator but that said filing was not a waiver of its rights against defendant. Defendant made no response to said letter. A copy of said letter and return receipt is appended hereto as Exhibit "D".

18. (a) Under date of January 14, 1966, a Creditors' Committee, which included counsel for the plaintiff, (who at that time did not represent the plaintiff herein), sent to creditors of Sun Ray Drug Company and/or Penrose Industries Corporation, a proposal for settlement with general unsecured creditors by the payment of 32 1/2% of their claims in full settlement, a copy of which is hereto appended as Exhibit "E". The settlement was recommended by the Creditors' Committee and was to be payable as follows:

8 1/2% in cash on July 13, 1966

8% on January 13, 1967

8% on July 13, 1967

8% on January 13, 1968

(b) A copy of the agreement with the Conservator and Penrose Industries and Sun Ray Drug Company providing for the foregoing proposal is hereto appended and marked Exhibit "F".

19. Defendant participated in the aforesaid settlement negotiations and along with his brother, Harry, agreed to guarantee any deficiency in funds needed for the settlement, over and above the payment to be received by the Conservator from Marrud, Inc.

20. A copy of the letter from the Conservator setting forth the above proposal is appended hereto as Exhibit "G".

21. Plaintiff filed its acceptance of said proposal with the Conservator. Plaintiff did not use the acceptance form submitted by the Creditors' Committee, a copy of which is appended hereto and marked Exhibit "H-1", but submitted its acceptance on a form in which plaintiff specifically reserved its rights against the defendant. A copy of said acceptance is hereto appended and marked Exhibit "H". Plaintiff ...

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